This dissertation analyzes the differences in wealth between White individuals and Black individuals and examines the reasons behind the differences. Chapter 4 analyzes the effect of income and earnings, among other variables, on the level of wealth for individuals with the same age, education, and similar average lifetime income. Then, the wealth gap is computed for individuals and their matches. The results show that even after choosing White and Black individuals with similar characteristics, a wealth gap persists. However, choosing individuals with similar income reduces the wealth gap. Chapter 5 moves beyond income and examines the effect of inheritances and parental wealth on the level of wealth for White and Black individuals. The results show that both inheritance and parent wealth reduces the wealth gap for single females but not for couples or single males. In addition, parental wealth has a greater effect on wealth than inheritance. Chapter 6 examines the level of wealth accumulation between 1994-1999, 1999-2005, and 1994-2005 as well as the saving rate and rate of return experienced by White and Black individuals during these periods. The results show that White individuals almost uniformly experienced greater rates of return than Black individuals, at the median. On the other hand, the saving rate does not follow any particular pattern. The results also show that portfolio composition has a larger impact on the wealth gap than the saving rate, the rate of return, and inheritance for single males and females.
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